Monday, November 08, 2010

I got a raise recently. It was a real raise - not one of those "Oops! Eaten by Inflation!" raises, but an honest-to-goodness increase above the cost of living. So it was interesting to me to read Nicholas Kristof's "Our Banana Republic" from yesterday's New York Times.

In my reporting, I regularly travel to banana republics notorious for their inequality. In some of these plutocracies, the richest 1 percent of the population gobbles up 20 percent of the national pie.

But guess what? You no longer need to travel to distant and dangerous countries to observe such rapacious inequality. We now have it right here at home — and in the aftermath of Tuesday’s election, it may get worse.

The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976. As Timothy Noah of Slate noted in an excellent series on inequality, the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana.

C.E.O.’s of the largest American companies earned an average of 42 times as much as the average worker in 1980, but 531 times as much in 2001. Perhaps the most astounding statistic is this: From 1980 to 2005, more than four-fifths of the total increase in American incomes went to the richest 1 percent.

That’s the backdrop for one of the first big postelection fights in Washington — how far to extend the Bush tax cuts to the most affluent 2 percent of Americans. Both parties agree on extending tax cuts on the first $250,000 of incomes, even for billionaires. Republicans would also cut taxes above that.

In the past, many of us acquiesced in discomfiting levels of inequality because we perceived a tradeoff between equity and economic growth. But there’s evidence that the levels of inequality we’ve now reached may actually suppress growth. A drop of inequality lubricates economic growth, but too much may gum it up.

Robert H. Frank of Cornell University, Adam Seth Levine of Vanderbilt University, and Oege Dijk of the European University Institute recently wrote a fascinating paper suggesting that inequality leads to more financial distress. They looked at census data for the 50 states and the 100 most populous counties in America, and found that places where inequality increased the most also endured the greatest surges in bankruptcies.

Here’s their explanation: When inequality rises, the richest rake in their winnings and buy even bigger mansions and fancier cars. Those a notch below then try to catch up, and end up depleting their savings or taking on more debt, making a financial crisis more likely.

Another consequence the scholars found: Rising inequality also led to more divorces, presumably a byproduct of the strains of financial distress. Maybe I’m overly sentimental or romantic, but that pierces me. It’s a reminder that inequality isn’t just an economic issue but also a question of human dignity and happiness.

This rising inequality engenders obstacles - it is a manifestation of dukkha. I can already see that I can do things with money that I could not twenty years ago, and I can do it because I can effect a multiplier effect on others and their work from I do that others cannot. (Do read Noah's piece on income inequality.)

Now, with the exception of NellaLou's blog, (especially here) this particular issue isn't getting much attention in the Buddhist blogosphere. And it kind of tells me how really alienated we as Americans in particular are (I beg the understanding of all you European readers & bloggers for the moment, but it's an American, and to a lesser extent, UK problem).

You know folks - and you know to whom I'm referring - you can can the "Free Tibet!" and "Free Burma!" and the latest outrage du jour platitudes etc. and so forth. I am mildly amused at one site that boasts "Made on a Mac" - now don't get me wrong, I love my iPhone too, especially the fact that it uses patents on technology I developed back when I wasn't approaching income levels that were comfortable. Plus, I'd actually buy Apple stock if I didn't think it was a tad overpriced at the moment. But the same site seems to be ignorant of the word "Foxconn," or, for that matter, terms like "Taft-Hartley."

I'm not saying this as any kind of a boast, but to note that although my boat's rising in the tide, too many folks in America are drowning, and that's just not good. It's not good for me, it's not good for them, it's not even good for the plutocrats. Eventually this economic and political system will be come highly unstable, and I think the recent elections are the reflection of that. Our system's out of balance, and the rebalancing will likely anything but painless, and to minimize the discomfort and suffering it's useful to approach this - like everything else - mindfully.

All of which is to say, Dudes, Tibet is hereBurma is here. Those younger folks that go those your meditation seminars that aren't investment bankers, lawyers, or high priced creators of intellectual property? They're Tibet. They're Burma. They're Vietnam.